Deal could be rotten for Apple News analysis

Apple and IBM's agreement to work together on everything from multimedia to marketing to operating systems -- an astounding blend of conflicting cultures in the computer business -- could well be one of the most significant arrangements in computing history.

It just might not be for the reasons the two companies, especially Apple, would like.

hTC Last week, when 300 industry executives got together for Stewart Alsop's annual Agenda conference in Southern California, the agreement was almost the only topic of conversation, both public and private. Handicapped by the lack of final details, many of the industry's top executives still made persuasive arguments why the arrangement might not be the answer to either company's ills. Apple, they said, may share with IBM its talents at creating user-friendly operating systems and get very little in return.

The biggest problem with the agreement, or at least the surrounding publicity, is that it centers on Pink, the next-generation operating system Apple has been working on for about four years, not the marketing aspects of the deal.

The Pink project is huge -- there are 1 million lines of programming code, according to Apple Chief Executive John Sculley. Indeed, a former Apple executive who was at the conference says the company has let Pink grow too fast, which in turn might have led Mr. Sculley to seek some sort of deal to help spread out the immense cost of such a project.

IBM, which hasn't been able to convince anybody that its OS-2 system is the road to the future and which is tired of riding the Microsoft tiger, agreed to be co-sponsor in hopes of capturing some of Apple's polish on user interfaces and the like.

But Pink, which will run on future, RISC-based computers, isn't today's solution. That, for Apple users at least, is System 7, which after three years of living as vaporware finally got its 15 minutes of fame last spring before it was overshadowed by the mysterious Pink. Customers don't want to worry about next-generation operating systems when they haven't figured out the current one.

Software developers, too, seem frustrated. After waiting years for System 7 to arrive so they can make programs that take advantage of it, Apple starts talking about yet another system.

Of course, Pink is not all there is to the IBM-Apple agreement. Talk to many people within Apple, and you'll hear frustration that Pink is getting all the ink. They point to cooperation in multimedia as a significant part of the deal. But mostly, they practically salivate over the prospect that IBM's acceptance of Apple's software, and agreement to work on more closely networking computers, will give Apple the open door into corporate America desperately wants.

It's not that easy.

For one thing, both Apple and IBM acknowledge they are still hardware companies and still compete at selling computers.

Apple, facing culture shock in dealing with IBM internally, faces an even bigger shock on the outside.

The former high-ranking Apple executive put it this way: While Apple may have an interesting approach to computing -- indeed, one corporate customers would like -- they are outgunned by the IBM sales force. "IBM has 100 people calling on MIS managers for every one from Apple," he said. "IBM can say, 'Look, we've found a supplier to take care of these things you wanted. Now you can plan with us and stay with us.' Whose message is going to get across?"

That's a good question. Unless Apple does more talking about that, and less about Pink, it could wind up being very blue about its IBM deal.